[WSBAPT] breach of duty

Wed Oct 26 14:26:32 PDT 2022

In the case of documented, I think that I referred to "unexplained withdrawals" that could represent losses to the estate. In another case, I called to ask the client about all of the withdrawals and she said that she had taken fees on an "as needed" basis and not bothered to tell me.  Her idea of a fee was grossly excessive.  In a third case, the PR admitted that he needed money and just took it.  But he was contrite and agreed to confess judgment.  In other cases, the PR just went silent and dissappered.

I should add that the above are not common in my practice.

  Bruce

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Candace Wilkerson
Sent: Wednesday, October 26, 2022 1:54 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] breach of duty

Wow, this is really helpful, Bruce!  Luckily I have never dealt with the situation, but may end up doing so one day.

One question: you mentioned you "documented thefts"; so you would only move forward if you had documented proof that the PR had taken funds and there was either no reasonable explanation for doing so, or the PR's reimbursement of what had been taken?

What a nightmare.

Thanks,
Candace Wilkerson

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From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> On Behalf Of Bruce Moen
Sent: Wednesday, October 26, 2022 4:13 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] breach of duty

I agree with Eric and have had documented thefts.  In addition to the RPCs, there is dicta in An old Disbarment opinion In re Fraser that preceded the permissive reporting that is now in the RPC.

I've had several.  Each had a different backstory. My practice evolved to the following:

Nagging the client and documenting the nagging for any Exhibit A that may be appropriate in the future.

Drafting a Status Report to the court which advises the court of a problem.  How the problem is described requires some artful drafting. Ask yourself how the Bar might view any Bar Complaint on the issue of loyalty to the client.  How new counsel might view it to launch a potential attack on your office for unnecessarily setting up your client for a lawsuit. How the heirs might view it with the permissive reporting of the RPCs if they've been ripped off already and/ or to stanch further losses.

Caution: do not tell the court what to do no matter how egregious. Do not even suggest a remedy or you will hand the client a Bar Complaint.  I conclude by inviting the court to take whatever action sua sponte that the court deems appropriate. The proposed Order says only that the matter of (lack of communication)(missing funds)(whatever) has been brought to the attention of the court and the court sua sponte takes the following action.  Thence followed by blank spaces for the judicial officer to add whatever.

Then I mail the draft Report and the proposed Order to the client with an ultimatum: either respond within XX days or I file the Petition.

I either file under seal or present in chambers. I also file a Notice of Withdrawal. The court has invariably appointed a G.a.l. to investigate and report back to the court. The G.a.l. then advocates for removal, recovery, etc.

I'm not saying this is a perfect approach, but its worked for me.

  Bruce Moen

From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> On Behalf Of Eric Nelsen
Sent: Wednesday, October 26, 2022 8:46 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] breach of duty

Copying from a post I made a while back on this issue:

Start with RPC 3.3<https://url.emailprotection.link/?b7UE2yfMelFt9Xz7NIwUT90vB9fymjqqKCDGWsCLnATXPTI86K14NDVgGpSsG69c6u-5bvn9tfS9zN4O1Y-LiRyDFMMlM280ujHCOdp6dd4595_-kLFy8l2T2t2k0Vg1t>, especially sections (c) and (f) and comment 14; coupled with RPC 1.6(b)(8)<https://url.emailprotection.link/?b7UE2yfMelFt9Xz7NIwUT90vB9fymjqqKCDGWsCLnATXPTI86K14NDVgGpSsG69c6__oOmr_qehGLeh7vKWTTscRUlkve1lB3XinRpRZynWyuuqSjimiAvUaaaw4JnSSu>. The "shall" in RPC 3.3 coupled with the "may" in RPC 1.6 have been interpreted to mean that we are required to disclose known malfeasance to the court.

That said-we still have confidentiality and loyalty requirements to the client, so I bend over backwards to give the client every chance to give me what I need to protect them. I have been in this situation before, and have explained to the client (without being accusatory) that I need backup documentation for my records because I can't prepare submissions to the court without having verified information. On one occasion I made clear to the client that I am required to report to the court any breach of fiduciary duty and strongly urged them to pay some money back to the estate, which repairs the breach and removes the duty to disclose. That convinced them to return the funds.

On another occasion I was forced to withdraw because the client refused to provide documentation to me. It wasn't a case where I had an actual indication of malfeasance; just an uneasiness about the scarcity of statements coupled with the client's resistance to providing anything to me. Per RPC 3.3, comment 8, my suspicions did not rise to the level of "known falsity" that had to be disclosed. But I wanted nothing further to do with that client.

I have yet to be thrust into a situation where I had documented evidence of malfeasance and the client refused to remedy the breach, such that I would be required to disclose. Knock wood...

Sincerely,

Eric

Eric C. Nelsen
Sayre Law Offices, PLLC
1417 31st Ave South
Seattle WA 98144-3909
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From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> On Behalf Of Shannon Jones
Sent: Wednesday, October 26, 2022 8:29 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: [WSBAPT] breach of duty

Listmates, If a non-intervention PR has breached fiduciary duty (like estate money is missing), is their attorney required to notify the probate court prior to withdrawal, notify other heirs, both? If the answer is yes, how is this done w/o revealing attorney client privileged communications - Shannon

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